The whole point of "you bought it" is a total red herring here. Is region locking OK by you and free DVDs that are handed out to anybody who asks? Because that is exactly how YouTube serves video files!
Also, no, they don't need to generate revenue. They want to generate revenue, but they aren't entitled to it. It's not a good business model to spend money (hosting/serving video files) giving stuff away for free. However, that's what Google is doing here; it's not the responsibility of any other entity (not the government, and certainly not a competing company) to ensure that they manage to earn revenue despite giving the content away for free. If Google doesn't like what Microsoft's app does, they can either (try to) refuse to serve it any video content (good luck with that), or they can stop giving away the content for free.
Well, or they can go complain to somebody in government, I guess. The courts have been braindead enough to uphold TOS as though they're actual contracts on occasion, though not often. The usual argument is copyright law, and that's completely off the table here; Microsoft is displaying the videos exactly as Google is serving them!